If funding to the courts continues at the same level, the judicial branch expects a $37.8 million deficit in 2011, Minton said to members of the Interim Judiciary Committee. Minton also said the courts, with its $293 million annual budget and 3,700 employees, might be hit by a round of cuts this fiscal year.

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He noted that Gov. Steve Beshear's administration has projected a revenue shortfall of $294 million in the executive branch this year, and on Friday a group of independent economists might increase that figure.

It's likely that Beshear will ask the judicial and legislative branches of government to bear the burden to meet the constitutional mandate of a balanced state budget, Minton said.

Beshear said he has not yet formulated a plan on how to address a budget shortfall for this year, but he expects to have one in December.

Minton told lawmakers that the judicial system's money problems primarily are caused by personnel costs and funding of new judicial centers.

He said the looming deficit means the courts system must make cuts in spending, increase court fees or "face significant reductions in services to the people of the commonwealth at a time when citizen demands on the justice system are greater than they have ever been."

He noted that 1.23 million new cases were filed in Kentucky's trial courts in the fiscal year that ended last June 30. That is an increase of about 40,000 from 2007. The number of cases jumped another 43,000 from 2006 to 2007.

Minton said he has tried to reduce personnel costs, which make up about 88 percent of the courts' operating funds. From May through September of this year, 73 full-time positions — or 0.2 percent of workers — have been eliminated, mostly through attrition.

State Rep. Robin Webb, a member of the Judiciary Committee and first vice-chair of the House budget committee, said she was "distressed, but not surprised" that the judicial branch is having money problems.

"There's going to have to be a totally serious restructuring of our internal workings in all three branches of government," she said. "There is no choice."

Still, Webb said, she would not vote for any more fee increases for Kentucky courts.

Beshear said he plans to first reduce state spending, and then, if necessary, look at ways to produce more revenue, such as increasing the 30-cent-a-pack cigarette tax.

"This is not going to be an easy thing to get through but we can get through it. We will get through it if we work together," Beshear told reporters after kicking off an effort to boost enrollment in the state's children's health insurance program.

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